The bone version is just an idea, I have no experience with bones so far.
My suggestion was that each bone of the cloth is set to the bone with the same name of the character, not only the master bone.

http://www.puppenheim.org/
http://www.wuerfels-welt.de
Old Game Tutorial: http://www.puppenheim.org/MITutorial.zip
Free Game Editor: http://puppenheim.org/AlienalsWeihnachtsmann.zip
http://www.puppenheim.org/blender_starting_main_settings.txt